4 Surprising Ways to Help You Build Wealth

3. Buy fewer cars. The AAA estimates the average car costs $8,876 per year to own and operate, based upon 15,000 miles of annual driving. That’s a huge chunk of most household budgets. But you can save significant amounts of money simply by owning your cars longer. In my book “Deal with Your Debt,” I calculated that someone who buys a car every 10 years rather than every five years would save more than $250,000 over her driving lifetime (assuming the first car cost $20,000, with subsequent car prices adjusted for 3 percent annual inflation, and that each purchase was financed with a five-year loan at 6 percent interest). You can save even more by buying gently used cars instead of new and paying for cars with cash, rather than financing.

4. Fund a Roth. Everybody knows the advantages of Roth IRAs, don’t they? Apparently not. Fewer people have Roths than have traditional or rollover IRAs, according to the Employee Benefit Research Institution’s IRA database, which contains information on 25.3 million accounts and 19.9 million people. Nearly 73 percent of IRA owners had traditional or rollover IRAs, compared to the 28.1 percent who owned Roths.

Roth IRAs don’t offer upfront tax breaks, but money withdrawn in retirement is tax free. That’s a huge perk, but not the Roth’s only one. There are no required minimum withdrawals for Roths as there are with other retirement accounts, so the money can be left to grow and even bequeathed, income tax free, to your heirs. The younger you are, the more likely your tax rate will be higher in retirement than it is now, which makes funding a Roth a good bet.

Liz Weston is an award-winning journalist and author of several money books, including the best-selling “Your Credit Score.” She writes about personal finance at her site AskLizWeston. You can like her on Facebook and follow her on Twitter.